Lawyer Explains How Ripple Uses Escrow to Protect the XRP Price

Cryptocurrency analyst and lawyer Bill Morgan recently weighed in on Ripple's use of escrow accounts for XRP coin holdings. Morgan breaks down key considerations from the ongoing SEC lawsuit against Ripple, community perceptions, and Ripple's strategic narrative around escrow.

The SEC argues that Ripple's escrow deploys different techniques aiming to stabilize or dictate XRP's price. Specifically, the escrow reserve periodically releases fixed amounts of XRP on a monthly schedule. This structured discharge aims to avoid sudden flooding, which could cause volatility.

However, the SEC asserts this managed approach sustains XRP's value by administering available supply levels in the market moment-to-moment.

Alternatively, some XRP supporters believe escrow actually constrains price appreciation. Their logic is that regular escrow distributions enlarge overall circulating XRP, exerting downward pressure through dilution. This view hinges on extra coin additions weakening individual value and hindering gains.

Morgan challenges the suppressing notion, deeming this mindset misguided. While not explaining further, his stance implies escrow has more favorable goals aligned with Ripple's narrative, not impediment. He trusts it demonstrates prudent management rather than hindrance.

Ripple consistently frames escrow as conscientious stewardship over its XRP, aiming for predictable rather than uncontrolled distributions ensuring stability and reassuring holders/markets.

Additionally, Morgan notes the steadily dwindling escrow balance lessening Ripple's influence over circulating supply long-term. This decentralizes control, fitting broader crypto aims of wider distribution with less central authority.